but rich C-suite aliens managed to buy into the entire illogical chain.

When many decision-makers are incentivized to only care about their next quarterly bonus or stock grant, just like the subprime crisis, people will absolutely set their company up to fail regardless of the consequences. Companies have trained people they are disposable so why would they act in the long term interest of the company? Economics, that is, incentives, are undefeated in making people do things. It may not be what someone intends, but being naive about economics is why adults are needed in designing reward systems (from government policy to company programs).